Executive Summary

Africa's pan-regional MNOs continue jockeying for market position

Mobile telephony is by far the dominant telecom platform across Africa, accounting for more than 90% of all telephone lines in the region. As a consequence, mobile internet also accounts for a similar proportion of all internet connections. Given the size and range of markets on the continent, market penetration is varied between countries. By the end of 2016 the highest mobile penetration was found in countries including Libya (155%), Botswana (176%) and Gabon (190%), which reflects the popularity of consumers having multiple SIM cards. By contrast, a number of countries have a penetration rate less than half of this level.

In many countries the recorded number of subscribers has fallen since 2015 as regulators step up efforts to compel mobile network operators to enforce provisions by which dormant SIM cards are taken off their books, and services are ended for non-registered SIM cards. The latter is intended to address fears that crime and civil disturbances can be facilitated or orchestrated via mobile phones.

The introduction of prepaid services was a catalyst for strong mobile subscriber growth across Africa. By late 2016 the prepaid sector accounted for up to 99% of the overall subscriber base in many markets. The steady decline in tariffs, encouraged by competitive pressure, has meant that a greater proportion of the continent's estimated population of 1.34 billion can afford a mobile phone, and so make use of voice and data services which are in many areas cannot be accessed via fixed-line networks.

Mobile services are also increasingly contributing to the growth of national economies, stimulated by productivity and efficiency gained brought about by the increased take-up of a range of services, as also by tax revenue.

Although there are a large number of network operators across the continent, as also smaller niche MVNO players, there are also a small number of pan-regional network operators. These include Millicom, Orange Group, Vodacom and Bharti Airtel. Some rationalisation of their operations continues as these players adjust their strategies to fit in with market positions and expectations. Thus Orange Group in late 2015 sold its entire 70% stake in Telkom Kenya, having sold its local Ugandan unit in the previous year, when it became clear that it was unlikely to gain market share and become at least the number two player. Focussing on core markets was also the reason Millicom exited Botswana in mid-2016.

Although ARPU remains relatively low for operators, considering the level of disposable income in the region, Africa remains a key area for investment among players. In coming years much investment will be geared towards securing licences and spectrum as well as to upgrading networks to take better advantage of the capabilities of LTE infrastructure as LTE coverage expands.